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Consumers 'distrust' financial services for pensions

28 February 2006

The vast majority of Britons distrust the financial services industry when it comes to looking after their pension plot, according to a new survey.

Just 11 per cent of UK residents feel that their savings would be most safe with the financial services industry, a study of more than 1,000 adults by consumer watchdog Which? revealed.

Around 40 per cent would rather put their trust in an independent body, while a further one in five trust the government most.

The survey also found that when respondents were provided with details of the way in which the National Pension Savings Scheme (NPSS) would function, it was more trusted than the industry model.

More than half of the survey participants said they would trust the NPSS more than the industry model.

Peter Vicary-Smith, chief executive of Which?, said: "The government now faces a clear choice. Does it choose model like the NPSS which is cost-effective and has the clear backing of consumers?

"Or does it choose a model like that proposed by the Association of British Insurers (ABI) which is likely to cost around two or three times more than NPSS and offers more of the same from an industry which has lost the trust and confidence of the public."

In other research, the ABI discovered a contrasting picture of where consumer pension trust lies.

"We have done our own survey on consumer trust and it shows, in fact, insurance providers and employers are more trusted than the government to deliver on pension promises," said Jonathan French, ABI spokesman